- This topic has 332 replies, 133 voices, and was last updated 13 years ago by
.
- Posts
you are the first one whose WACC is same like mine
@muzna88 said:
Q1 I inflated all cashflows n discounted on nominal terms , B part URGHHH i dn’t seem to get any mark there , Part C i could’nt remember anything so thought of Capital rationaing,sensitivity anlysies and Probability .Q2 Before Issue of Market WACC was 8.6
After issue it was 8 , probably m wrong bcz i cldn’t figure out how to calculate growth 🙁
B AND C i left them allQ3 DID ok , it was all theoryy huhhh
Q4 a) forward hedge was preferable
b) bulk discount was preferableI hope m correct
Praying for atleast 55 marksss 🙁
- Topics: 0
- Replies: 52
- ☆☆
@jaybhudia said:
can anyone tell me if i wrote in q1c if i wrote irr,npv and profitability index if any is righti don’t think u will get marks for that .
theoretical part was complex than calculation.overall it was not easy.hoping for 50.
Q1. I was confused on what rates to use but since it asked for nominal rates so i used 12 %…i inflated the seling ,vc, fc. forgot to recover working capital in year 4 :(…. investment appraisal wrote about npv, irr.. i think i messed up
Q2. I think it was about the effect of cost of debt on wacc… i just hope i did the calculations right on wacc..
Q3. Was really running out of time… really time pressurizing .. keeping my fingers crossed><
Q4. Did we have to calculate EOQ for bulk discounts? i did the settlement part managed to do it but somehow messed up with bulk discounts. i have a feeling i mssed up money market hedging.. coz i got a somewhat a big diff btn money market and forward… it was all self study fr me….. i hope i can make it…soo depressed after studying the whole book whole kit in exam its like i m the dumb of all . This paper is not justified complex calculations and theory requires a lot to write n time is too less .
i left easy 10 marks theory parts coz i ran out of time .
can some1 tell what did examiner mean by saying calculate MV of WACC ? got confusd on dis partactually market value of wacc means to take market value of equity and the market of debt when calculating the WACC and not their book values!!!
U guys. What is the best exam technique for passing F9. It was abig challenge forme especially interms of managing time.
- Topics: 1
- Replies: 90
- ☆☆
pray hard the examiner don’t ask something out of the box
previous sittings don’t have that much of theories compared to this time!
I thought the bond was redeemable at 5% premium – not at par. So not sure if I was correct. Also I think to gain marks it is important to show all workings because the final answer, although important, is not all that matters. This is my opinion.
What answer did you get for the NPV?@y.prananv said:
I think for the WACC part,I also got 8% something and then got a lesser WACC after the issue!!! 😀 …..but then when we were told what affects the market value of tradable bonds,what was we supposed to write??? :Smy theory = fairy tails :p only numerical question saved me every time (from T1 to F7) let see what happened this time
- Topics: 1
- Replies: 90
- ☆☆
out of box as something that is not expected?
This sitting does not feature Islamic Finance
which everybody is expectingthat is 1 kind of unexpected thing from the expectation we had LOL
For question 1, some people recovered the working capital in year 4 but as the project was continuing for years to come i did not recover on the assumption that there would be no recovery – just added inflated debits for the yearly increase in demand. came out with a positive NPV.
Talked about sensitivity analysis, EV’s and aggressive and conservative approaches etc…Question 2 i got a cost of debt as about 4.6% (didnt round it up) and then after the bond issue it was still the same!!
I used the redemption period of the new bonds for the existing ones although looking back i guess they could have been classed as iredeemable debt…. hmm….On director’s views, i said that he was right to assume the WACC would decrease but this would not necessarily raise the market value of the company as gearing may increase and interest cover etc so more risk. Discussed traditional, M&M theories and then realted back to the assumption that there is more to the argument than just WACC and theory and that external views were also a factor.
WACC came down by about 1% on my reckoning after bond issue.
Question 3 – god knows. Started to do some calculations, got a bit lost, wrote a bit of theory! LOL… not good.
Question 5 – forward hedge was better.
Think i messed up the second part as i said that the .5% discount was best. Got confused with the interest bit. I calculated that a reduction in payment terms would cost the company 60 days extra in overdraft but i have no idea why now!!!
Overall, i felt fairly prepared. This was my second sitting. Got about 44 last time and really hope for 50 but didnt answer two questions worth 10 marks so instantly down to 90.
Not sure if i did enough but hopefully the theory might pull something back. Pleeeeeeeeeease!!!!! LOL….- Topics: 0
- Replies: 2
- ☆
The questions seems good,but i don’t belive any one can explicitly done such type of time consuming exam in three hour
- Topics: 0
- Replies: 2
- ☆
The questions seems good,but i don’t belive any one can explicitly done such type of time consuming exam in three hour
@ejigsew said:
The questions seems good,but i don’t belive any one can explicitly done such type of time consuming exam in three hourI agree – time is of the essence here. But then I suppose you have to very brief about all the discursive answers, you do not have much time to go into detail. The theory you have to do in full, I suppose that’s why the paper had more discursive than theory I think (maybe 60/40).
- Topics: 0
- Replies: 26
- ☆
@tzxsean said:
someone asked me bout PV of cash flow in perpetuity ?I just take the cash flow before tax on year 4 and divide with 12%
and minus tax of 30%at first I thought of applying inflation of 3% onto the cash flow but at the end I din’t do it. Should I inflate it?
I don’t think so, the question said assume the PBIT is constant after that right?
I calculated the net cash flow for the 5th year, divide it by the cost of capital, and then further discount it to the PV- Topics: 0
- Replies: 13
- ☆
@redrose said:
Q4. Did we have to calculate EOQ for bulk discounts? i did the settlement part managed to do it but somehow messed up with bulk discounts. i have a feeling i mssed up money market hedging.. coz i got a somewhat a big diff btn money market and forward… it was all self study fr me….. i hope i can make it…Dont think Q4 was about EOQ. If I remember correctly:
Option 1 – discount 0,5% on 900000 purchase is gain of 4500
Shorter payment of 60 days is cost of 60/365 * borrowing rate * purchase = around 6000 cost
Overall -1500 or so worse than base scenario
Option 2 – discount 3,6% = 32400 is gain
4 orders instead of 12 is 8*200= 1600 gain
Increased holding cost of (30000/2)*2,2 = 33000 instead of 10000/2 * 1 = 5000 so 28000 additional cost
Overall 32400+1600-28000 = 6000 better than baseNumbers might be a bit off. Anyone done it like that?
- Topics: 0
- Replies: 4
- ☆
The paper was too long to be completed in 3 hours.. i just hope to pass…Dont wanna see this paper again…
- Topics: 1
- Replies: 90
- ☆☆
@eugeneksc said:
I don’t think so, the question said assume the PBIT is constant after that right?
I calculated the net cash flow for the 5th year, divide it by the cost of capital, and then further discount it to the PVthey only want Net cash flow after tax
can any 1 tel abut q4
last part eoq
can any1 solve it in briefly
and tel abut working capital policy was it about agresive,conservative etc- Topics: 0
- Replies: 13
- ☆
- The topic ‘*** F9 June 2011 Exam was … Post your comments here and vote in Instant Poll ***’ is closed to new replies.